Is Insurance a Necessity for the Millennial?

30 December 2022
5 min read

Millennials are the most prominent generation on our planet, and they're also the most financially vulnerable. They've grown up in a world where it's easy to make mistakes, but that doesn't mean they should be left at risk of financial ruin because of it.

Millennials are more likely to be independent and self-sufficient than previous generations, and they are also more likely to have jobs that provide health insurance coverage. However, considering the many risks of being an independent adult—especially in today's world—it becomes clear that millennials still need insurance policies.

How is Insurance Important for Youngsters?

First, always remember every insurance coverage with an insurance premium that must be paid to keep the policy alive.

The second important thing is that the insurance premium positively correlates with age. Thus, with the rising generation, the premium paid also increases. Therefore, the best time to invest in a life risk cover is when you are young and healthy. While at school, if you can opt for an insurance policy, nothing like it.

Buying life insurance and health insurance is not only important from an external point of view.

Why Should Millennials Consider Buying Insurance Early?

Millennials are the most educated generation in history, and they're also the most likely to be uninsured. It's more than just a matter of not having health insurance; it's about how being uninsured can affect your life in ways you might not even realize.

For example, if you have no health insurance, you're at risk of being unable to pay for certain kinds of care or services if you get sick or injured. As a result, you could pay out-of-pocket for those things, leaving you with a hefty bill during tax season (or even later).

Or, if you're in an accident and get injured, you may not be able to afford all the medical bills associated with that injury. In either case, you'll want to think about buying insurance early on so that if something does happen that costs money but isn't covered by your regular policy—like a broken leg or concussion—you'll have enough cash on hand to cover that cost until the end of the year when it comes due.

Here are the reasons why millennials should buy insurance for themselves-

1) You Are Working And Healthy, So Its More Affordable

Millennials are the most active and healthy generation in history. That means they can afford to buy insurance early, which is essential because the longer you wait to purchase insurance after you're no longer healthy or working, the more expensive it will seem with your other life goals.

2) Unexpected Uncertain Events Stand Secure

You may not have much income if you're still in college or just starting your career. You might have student loan debt or be living at home with your parents while you save up for a place of your own.

If something unexpected happened—like a car accident or job loss—it would be difficult to afford coverage without taking on additional debt or living at home with your parents until things improve. Buying insurance early will help protect your financial future so that whatever happens doesn't put an end to it all too soon.

You may also want to know the Important Things to Know About Insurance Plans

3) Protection Of People Who Might Be Depending On You

The truth is that the early purchase of life insurance can protect your family from unexpected events like illness or injury. If you have children or dependents who rely on you for support, then a paid upfront policy could be just what you need to ensure they'll be taken care of in case something happens to you.

Which Policies Are Available?

Some companies provide you with various types of insurance policies, with each of them serving a different need. Thus, it would be best if you chose the right plan according to your requirement.

Let us see some of them in detail-

  1. Term Plan

This plan covers your financials against untimely death. You get a high sum insured with a low premium, which is one of the most prominent programs to opt for. It is a pure-play risk cover plan and not an investment plan where your family is paid with the sum insured if any mishap happens during the coverage period.

On the other hand, if you survive by the insured period, your premium that is paid over the year lapses.

  1. Unit Linked Insurance Plans (ULIPs)

ULIPs are more of an investment plan and insurance policy combined where the investment risk is on the individual. Individuals can invest in this plan to generate returns while enjoying insurance coverage and tax benefits. Long-term investors are looking to secure savings simultaneously, so ULIP is the plan to opt for.

  1. Endowment or Guaranteed Savings Plan

These policies are for people who are not willing to take investment risks. In this case, you get a guaranteed return with a fixed rate or a return based upon a reasonable expectation along with insurance coverage. These are designed to meet specific goals such as a child’s education or wedding.

In addition, if the policyholder passes away during the plan, the remaining premium is waived, and the nominee is paid with the sum assured and the top-up sum assured.

How to Pick The Right Policy?

Once you have finalized your requirement, the next step should be to buy it. The earlier you buy, the better it will be, as your premium will be less. For example, a Rs 1 crore term insurance plan subscribed at 35 years would come at a premium of Rs 10,000 per annum; for a 30-year-old, it would be cheaper at Rs 7500 per annum.

Conclusion

Millennials are the generation to beat. They're the most educated, affluent, and tech-savvy group of people, and they're also the most likely to purchase insurance early.

Millennials are a big reason insurance companies take notice of their future customers. They want to ensure that Millennials have the best coverage for their needs and wants. This means ensuring they can access affordable, comprehensive coverage options that meet their needs.

The majority of Millennials prefer to buy their insurance early in life so that they can take advantage of affordable rates before they're old enough for full-time employment or other life events like marriage and children that would require them to purchase more expensive policies later on down the road (e.g., car accidents).

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